A white paper from the Rokker consultancy group suggests traditional iGaming platforms will begin to provide more prize draw opportunities to its customers due to lack of oversight, comparatively low acquisition costs, and a rising appeal among a growing customer base.
Britain’s UK Gambling Commission (UKGC) says prize draw markets must avoid being classed as gambling by offering a free-entry route and not relying on chance alone. Operators can charge for entry only if a genuine no-cost option exists and skill or knowledge is not required to win. If these conditions aren’t met, the activity may be treated as a lottery, requiring a licence or risking enforcement action.
Rokker highlights cheap cost of entry as potential attraction for customers
The study estimates the UK.’s prize draw sector generates about £1.3 billion a year, which analysts say is a massive amount given its market share. It includes roughly 7.4 million active participants and more than 400 operators competing across online platforms.
The white paper points to the minimal level of entry fees for the vast majority of customers. It states: “Participation is typically driven by low-cost entry, aspirational outcomes and entertainment value rather than purely odds-based decision making. As a result, prize draws provide iGaming operators and affiliates with access to a complementary, less saturated audience segment, with opportunities for more cost-efficient acquisition,”
Some of iGaming’s biggest companies are already starting to move on the market. In 2024, Flutter put money into a prize draw start-up as part of Gaming Innovators competition before investing in prize draw platform Rafflee in 2025.
The paper also suggests about 88% of prize draw users took part in commercial gambling or lottery products over a 12-month period, arguing it represents an ideal opportunity for iGaming platforms to cross-sell across segments.
It also suggests growing engagement from younger cohorts, including millennials and Gen Z, groups often seen as underrepresented in traditional iGaming offerings.
May sees new prize draw rules in force
In November last year, the UK government announced a new voluntary code for prize draw operators to follow. That comes into force next month. Participants from the general public will see enhanced safeguards and clearer information, it said.
Officials say the new code is intended to ensure consumers can take part safely. It sets out industry-wide standards aimed at improving consistency across operators, strengthening player protections, boosting transparency and increasing accountability within the market.
However, the Department for Digital, Culture, Media & Sport (DCMS) HAS said the measure does not constitute legislation and will not be legally binding on operators. It added the guidance will not override existing rules covering areas such as consumer protection, advertising standards and data privacy.
Officials working for the National Lottery have long argued that prize draws should be subject to the same regulatory requirements it faces. Indeed, outgoing CEO of the UKGC, Andrew Rhodes, is previously on record warning that prize draws could be cannibalizing the UK’s world-renowned lottery product.
“It’s getting close to being on a par with betting in terms of participation, also in terms of the average spending,” Rhodes said in February last year.
National Lottery Q3 results show it remains top of the pile
Despite the threat the National Lottery faces from private enterprise, it remains the most popular prize draw by a long way in the UK, accounting for the largest share of participation, according to the latest Q3 results released in February of this year.
While nearly half of adults reported some form of gambling in a four-week period, one in five said they only played lottery draws, highlighting its uniquely broad reach.
Removing those lottery-only players sharply reduces overall participation rates, including online and in-person activity, highlighting how heavily the wider market depends on draw-based engagement.
The data also shows lotteries outperform all other formats by a wide margin, with significantly higher participation than betting, scratchcards or online games, reinforcing their position as the entry point for many consumers.
As prize draw competitions gather momentum, all signs point to a market that is expanding quickly but anchored by long-established players. Low-cost entry, broad demographic appeal and strong crossover with traditional gambling products are driving interest from operators looking to diversify.
Yet despite the surge in new entrants and investment, the National Lottery continues to dominate participation, underlining its enduring role at the heart of the U.’s draw-based ecosystem.
With fresh guidelines set to take effect and scrutiny likely to intensify, the sector now faces a balancing act between growth and compliance, and it could shape how prize draws evolve over the coming months.
